In an action-packed encounter Sebastien Buemi grabbed third for Renault e.dams, but once again defending champion Lucas di Grassi was out of luck - retiring with yet another technical issue in his Audi.

Fourth place for Felix Rosenqvist and fifth for Sam Bird (plus the fastest lap bonus point) kept their championship challenge on track - but Vergne now leads the standings.

Vergne led away from pole position, but was under pressure into the first turn from Nelson Piquet Jr, who made a stunning getaway from fifth on the grid.

Video - 'You don't do that to your team-mate!' Crazy collision between leaders

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The Jaguar driver remained hot on the Techeetah Renault's tail, before the race was cooled down under the safety car as Jose Maria Lopez and Maro Engel had their cars retrieved following separate opening-lap incidents.

Piquet was caught napping at the restart, and over the first part of the race Vergne stretched out his lead to out to over 3.6 seconds before the mandatory pitstop.

But by now it was Lotterer in second place, the German having pulled a slick move on 2014/15 champion Piquet into Turn 3, the right-hander that would be the main action point on the entertaining Santiago track.

This was the first race where there was no minimum pitstop time and Rosenqvist was the big winner - leaping up from 10th place to fifth during the stops.

The big loser was di Grassi, whose car ground to a halt as he exited the pits, extending the miserable start to his title defence.

Video - Vergne and Lotterer kiss and make up after mid-race crash

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Bird stayed out a lap longer has rivals, but this didn't work to his benefit as he slipped from fourth back to sixth.

With Vergne losing radio contact with his pit, he was forced to be cautious with his energy use, and this meant that Lotterer closed right in.

On at least three occasions the team-mates touched, including one heart-stopping moment when Lotterer hooked his nose over Vergne's rear wing and literally pushed him into Turn 3.

Buemi and Piquet staged a great duel for third, with Piquet overcooking his braking into Turn 3 as he tried to reclaim the position.

As the Techeetah drivers held each other up, Buemi, Rosenqvist and Bird homed right in for a nail-biting conclusion, but Vergne and Lotterer held on ahead.

Video - Lap one chaos causes red flag in Santiago

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Piquet and Mitch Evans ensured it was a decent day for Jaguar in sixth and seventh - Evans having driven a stunning race to come through from last despite a 10s penalty.

Jerome D'Ambrosio was another big winner in the pits and scored his first points of the season for Dragon in eighth.

Antonio Felix da Costa was ninth for Andretti, while Nico Prost rounded out the points for Renault e.dams.